Articles Published in: 2017

November 6, 2017

Why Do People Prefer FHA Loans?

Why do people prefer FHA loans? It’s a question many ask, especially when comparing loan options to conventional, VA, or other non-FHA mortgages. What’s the appeal of the FHA mortgage loan? Why should first-time home buyers consider this option? FHA Loans Are Flexible FHA home loans aren’t just for one type of home, or for one type of buyer. There is no income limit for an FHA mortgage, the borrower has to be able to afford the mortgage based on the borrower’s debt-to-income ratio (how much money you have coming in compared to the amount going out each month for financial obligations). Credit ratings, employment, and other factors are also important, but the misconception that FHA mortgages are only for those who need financial help isn’t true. Any financially qualified | more...

November 3, 2017

What Should I Know About FHA Loan Employment And Income Verification?

By Joe Wallace

What should I know about FHA loan employment and income verification? For starters, it is easy to believe that the income and employment verification processes are the same thing-they aren’t. Borrowers should know that the lender will examine both employment history and income history. Depending on circumstances, that data could help a borrower get closer to loan approval. FHA Loan Rules Require Verification Of Both Income And Employment The lender must verify the basic facts of your employment including how long you have worked with the company, the nature of your pay, whether you have had any promotions or raises, etc. The basic rule for employment verification is that the lender must document two years of your most recent job history, or have documentation of your equivalent time spent in | more...

November 3, 2017

Are There Any Employment Documentation Rules For FHA Loans?

By Bruce Reichstein

Are there any employment documentation rules for FHA loans? Borrowers are naturally curious about how the lender must verify employment, and that curiosity may turn to concern if the borrower isn’t confident that his or her job history is enough to qualify for the FHA loan minimum requirements. What do FHA loan rules tell the lender to do when it is time to confirm your employment for FHA loan purposes? How FHA Loan Employment Verification Works The lender is required to independently verify your employment, which means getting documentation that does not come from any “interested party” associated with the loan. You may give your lender the contact information for your employer, but you cannot provide the required information the loan officer needs to move forward with the loan application. | more...

November 2, 2017

Are There Any Income Documentation Rules For FHA Loans? Part Two

By Joe Wallace

Are there any income documentation rules for FHA loans? We have been examining this question, referring to the FHA loan handbook (HUD 4000.1) to see what the lender must do when reviewing a borrower’s income. The lender must calculate the applicant’s debt-to-income ratio using only verifiable income, and there are specific procedures your loan officer must use to do this. Those procedures can vary depending on the nature of your income. Are you salaried, hourly, commission, or contract? Depending on your payment arrangements, the lender must calculate the income accordingly. FHA Loan Applicants With Hourly Income HUD 40001. tells the lender that for hourly income, the loan officer must determine whether the hours of employment vary or not. If they do not vary, the lender can use the current rate | more...

November 2, 2017

Are There Any Income Documentation Rules For FHA Loans?

By Bruce Reichstein

Are there any income documentation rules for FHA loans? That is what some borrowers want to know when they are ready to fill out a mortgage loan application. What does your FHA lender need to know about your income and employment? The FHA Lender Is Required To Document Your Employment And Income In the FHA loan handbook, HUD 4000.1, your FHA loan officer is instructed to document two years of employment, though that two years is not necessarily required to be with the same company or in the same job position. The lender wants to know your income history, whether you have gotten any raises, or whether recent job changes have resulted in a benefit to you income-wise. FHA Loan Rules Require Independent Verification Of Your Income This means that | more...

November 1, 2017

What Kind Of House Can I Buy With An FHA Mortgage?

By Joe Wallace

What kind of house can I buy with an FHA loan? Many first time home buyers want to know if FHA mortgages can be used to buy certain kinds of property including condos, duplexes, mobile homes, etc. FHA mortgage loans are flexible enough to purchase many different types of houses depending on the housing market, the lender, and local market standards. Not all FHA lenders will offer all the FHA loan types available to them, so it’s good to ask early if the property type you are interested in is an option. FHA Loans For Typical Suburban Homes The most obvious type of home loan is definitely available for purchase with an FHA mortgage. A suburban home can be existing construction, new construction, or built to suit. FHA loan requirements | more...

Five FHA Home Loan Questions To Ask Your Lender

November 1, 2017

What Do I Need To Get FHA Loan Approval?

By Bruce Reichstein

What do I need to get FHA loan approval? There are several areas that will factor into the lender’s decision to approve the loan, including credit history, time spent working overall, and the dependability of your income. In addition to your credit, employment, and other issues, the property itself must meet FHA loan standards. As you can tell, the issue of FHA loan approval is one that requires some planning and research for you as well as the lender. FHA Loan Approval Is Based On Financial Qualifications Where the borrower herself is concerned, getting an FHA loan approval hinges on three basic things. One is your current ability to afford the loan. Another is your past credit activity and your record as a good credit risk. And the third area | more...

Rent Or Buy? Arguments For Purchasing A Home With An FHA Mortgage

October 31, 2017

Income Requirements For An FHA Loan Part Two

By Joe Wallace

In a recent blog post we discussed income requirements for an FHA loan including basic debt-to-income (DTI) ratio issues, the fact that your income must be stable and reliable, and that you can’t earn “too much” to qualify for an FHA mortgage. One question some FHA loan applicants have at this point involves how the lender arrives at things like the debt to income calculation, how job reliability is determined, etc. How Does The Lender Calculate My Debt To Income Ratio For An FHA Home Loan? Simply put, the loan application will ask. You will have places in your application which ask about your monthly obligations, and the lender will also check your credit reports to see what active accounts you have. Some borrowers may be tempted to omit certain | more...

FHA Home Loans And First Time Home Buyers

October 31, 2017

What Are The Income Requirements For An FHA Loan?

By Bruce Reichstein

What are the income requirements for an FHA loan? Some aren’t sure if they earn enough to qualify for an FHA mortgage, and others are worried that they might earn “too much” to qualify, mistakenly believing that FHA loans are only for people within a certain income bracket. What’s the reality? FHA Loans Are For Anyone Who Qualifies There is no minimum income requirement for an FHA mortgage, and there is no upper limit or income “ceiling”. FHA loans are not targeted for any one income bracket. It is true that FHA loans are designed with more lenient FICO score minimums in mind, but that has nothing to do with the amount of your annual income or how you earn that income. Basic FHA Loan Income Requirements There ARE FHA | more...

Coronavirus And Home Loan Appraisals: What You Need To Know Now

October 30, 2017

FHA One-Time Close Construction Loans

By Bruce Reichstein

There is still time to consider an FHA construction loan in 2017. Those who are more interested in having a brand-new home built especially for them rather than purchasing an existing construction home with an FHA mortgage will be pleasantly surprised at the options available to them. FHA construction loans are different than other types of FHA mortgages and can be a bit more complex, but thanks to the FHA One-Time Close construction loan this process isn’t as complicated as other types of construction loans. Why? A Single Application and Closing Date For FHA One-Time Close Construction Loans The FHA One-Time Close construction loan is referred to in the FHA loan handbook, HUD 4000.1, as a “construction-to-permanent” mortgage. Some construction loans require the borrower to qualify twice; once to pay | more...